Argument recap: Court skeptical of government liability under FCRA

Posted Wed, October 3rd, 2012 4:10 pm by Ronald Mann

It was a tough day for the “plain-language” hawks on Tuesday when the Court heard argument in United States v. Bormes. The issue in this case is whether the United States can be held liable for money damages for a violation of the Fair Credit Reporting Act (“FCRA”). The case arose when an attorney (Bormes) paid a filing fee to the United States using an American Express card, through the government’s pay.gov facility. The receipt that Bormes received apparently showed the expiration date of his credit card, in direct violation of the Fair and Accurate Credit Transactions Act of 2003 (the “FACT” Act); that statute introduced several new provisions into the FCRA that were designed to limit the risks of identity theft.

Because the FCRA creates a cause of action for damages against any “person,” and defines that term to include “any . . . government,” Bormes has a strong argument that the plain language of the statute compels a finding that the government is liable for damages; Bormes finds an express waiver of sovereign immunity in the Tucker Act for claims under “any Act of Congress.” The government, on the other hand, contends that it is not liable under the statute, relying on the requirement that waivers of sovereign immunity must be “express” and the historical practice of using the Tucker Act to centralize all suits for damages against the United States in the Court of Federal Claims (and its various predecessors).

Ordinarily, you might have thought the case was over when Justice Kagan asked Deputy Solicitor General Sri Srinivasan early in the argument if he had “any textual argument” and got the reply that he “would have a more difficult case” if the Court “read the [statute] to its full textual reach.” But the Court quickly got past that point. Indeed, just a few minutes later Justice Scalia suggested that the plaintiff presented the question “whether the Tucker Act eliminates for all other statutes the presumption against liability on the part of the United States.”

To be sure, Mr. Srinivasan was drawn into the middle of a protracted debate between the Chief Justice and Justice Scalia as to whether it made more sense to think of the FCRA as establishing a specific remedial scheme that should trump the Tucker Act’s general scheme, or to think of the Tucker Act as a specific provision for Court of Federal Claims jurisdiction on monetary claims that should trump the FCRA’s general scheme. But Mr. Srinivasan successfully sat down without being pressed much farther on the difficulty of his textual argument.

By contrast, John Jacobs, arguing on behalf of petitioner James X. Bormes, was pressed ceaselessly by several of the Justices who clearly had bought into the government’s structural contentions. Thus, early on in Mr. Jacobs’s argument, Justice Kagan questioned him about his request for, as she put it, “a quite massive change in the law of sovereign immunity as we’ve known it.” Similarly, Justice Sotomayor summarized her take on the government’s argument as quite simply insisting that “[w]here you have a remedy [the FCRA in this case] you have to pursue that remedy,” which as it happens does not include an express waiver of sovereign immunity. When Mr. Jacobs challenged the notion that he was trying to avoid any “limitation” in the FCRA, Justice Kagan came right back at him: “But Mr. Jacobs, you are trying to evade a certain kind of limitation. The limitation that you are trying to evade is the rule that waivers of sovereign immunity have to be express.”

Reading the argument, I don’t think it is a coincidence that so many of the Justices found the government’s non-textual arguments about sovereign immunity convincing. So many of the current Justices – Scalia, Roberts, Alito, Kagan – came to the Court after service in high positions in the Justice Department, which necessarily involves exposure (if not devotion) to the government’s long-standing understanding of the limitations on its liability. The tone of the argument suggests that the Justices will have that understanding front and center when they meet to decide this case.

Download our Apple or Android App

On Friday, April 3, Justice Stephen Breyer spoke to students at the United Nations International School in New York City. The justice gave his talk remotely via video call, while self-quarantining at home in Massachusetts with his wife and daughter.